N-52024-2025 Bates White FAM Audit Report - Redacted
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IV.A. Background Solid fuel—i.e., coal and petcoke—has historically been NSPI's largest fuel expenditure. The same remained true in this Audit Period. Figure IV-1 and Figure IV-2 show that for both 2024 and 2025, solid fuel accounted for 6...
AI summary This section provides background on Nova Scotia Power Inc.'s (NSPI) solid fuel procurement during the audit period, focusing on coal and petcoke as the largest fuel expenditures. It outlines the review of NSPI's solid fuel-fired fleet, consumption data, fuel sources, pricing, contracts, and procurement processes. Biomass is excluded and covered in a separate chapter.
g coal supply was reasonable, forgoing an initial, higher-priced offer for unwashed coal, and then later agreeing to a lower price for washed coal that compared favorably to alternative coal supplies. Conclusion IV-19: NSPI's decision-maki...
AI summary The document concludes that NSPI's decision-making regarding coal and petcoke supply was reasonable, particularly in using competitive processes and index futures prices for evaluating offers. It also recommends considering methods to account for index price risk while maintaining supplier flexibility.
Inventory adjustments were highest in the months following the cyber event (e.g., Q2 2025 through Q4 2025). NSPI acknowledged that tracking inventories was made more difficult during the aftermath of the cyber event due to loss of access t...
AI summary Inventory adjustments were significantly impacted by a cyber event, leading to manual tracking methods and errors in fuel consumption reporting. NSPI conducted quarterly coal inventory surveys to verify and correct inventory levels, but errors in coal blend assumptions and inventory tracking at Trenton 5 and Trenton 6 led to incorrect heat rate data. Adjustments were made to align inventory records with survey results, and standardizing fuel blends may reduce future errors.
VI.A. Background In this chapter, we review and assess NSPI's procurement and supply management of biomass fuel. We begin by explaining NSPI's biomass fuel-fired generator, the Port Hawkesbury Biomass Unit ("PHB"). Next, we look at NSPI's...
AI summary This section provides an overview of NSPI's biomass fuel procurement and supply management during the Audit Period. It covers topics such as the PHB generator, fuel consumption, supply contracts, procurement process, and inventory adjustments, as well as actions taken in response to prior audit recommendations.
VI.B.11. Quantity and Quality Control of Solid Fuel NSPI receives all biomass deliveries to the Port Hawkesbury plant by truck. Trucks are weighed as they enter the plant (with a full cargo) and as they exit (empty), with the delta being r...
AI summary NSPI manages biomass deliveries at the Port Hawkesbury plant, using truck weigh-ins and LIMS for data tracking. PHP conducts quality control testing on biomass, including moisture content and fuel type, in compliance with ASTM standards.
in line with targeted moisture content. NSPI does not have the contractual ability to pursue damages, but does retain the right to reduce, reject, or suspend shipments that do not meet specifications. Conclusion VI-20: In the aftermath of...
AI summary NSPI did not conduct biomass inventory adjustments during a cyber event due to lack of access to Aligne Fuels. Once access was restored, NSPI applied a Q4 2025 inventory adjustment, which was pending agreement with PHP. NSPI has adequately addressed prior audit recommendations related to biomass fuel.
VII.D. Recommendations Recommendation VII-1: NSPI should conduct the analysis described in Recommendation VII-1, that was accepted by NSPI, from the 2022 – 2023 FAM Audit. 331 Bates White's February 21, 2025, Rebuttal Evidence, page 9 line...
AI summary The recommendations outline actions for NSPI, including re-analyzing Freepoint FT capacity offers, formalizing ERM positions on FT capacity, and clarifying risk allocation related to over-paying for unneeded FT capacity and mitigation strategies.
VIII.A. Background In this chapter, we assess NSPI's natural gas procurement processes and results during the Audit Period. The natural gas market in Nova Scotia remains supply constrained, which limited the number of natural gas suppliers...
AI summary This section examines NSPI's natural gas procurement processes during the Audit Period, noting supply constraints in Nova Scotia's market, NSPI's role as a price taker, and the increase in natural gas prices from 2024 to 2025. The focus includes procurement decisions, contract management, and transactions with counterparties and Emera Energy.
The Effect of Contracting for Firm Term Gas The term gas purchases were generally firm, which meant that NSPI could not contractually vary its daily gas purchases. Failure to take the gas would not necessarily be a breach of the base North...
AI summary The document discusses the implications of NSPI's firm term gas contracts, including the inability to vary daily gas purchases and the potential for selling unneeded gas at higher prices in other markets. It also mentions the tax issues and delivery points associated with gas sales and highlights the economic benefits of selling gas at high prices.
Visual Representations of Spot Trade Purchases from Emera The figures below compare the purchase prices of spot natural gas from Emera against purchases from non-affiliated counterparties on the same day, if available. As discussed above,...
AI summary The document compares the purchase prices of spot natural gas from Emera against non-affiliated counterparties, noting that Emera's prices were generally lower or occurred on days without other purchases. This is referenced from the 2022-2023 Bates White Audit Report, page 188.
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AI summary The text presents a table listing dates and associated financial data related to late day trades delivered to Baileyville, including a daily maximum value of $2.15 and a difference of $0.05. The data appears to be related to energy trading activities.
X.B.3.b.i. Fuel Switching Results In a prior Audit Report, we concluded that Tufts Cove's dual-fuel units had numerous instances during the Audit Period of being limited in their ability to burn HFO.429 We concluded that limitations on the...
AI summary The audit found that Tufts Cove Unit 1 cannot fuel switch, while Units 2 and 3 successfully switched fuels multiple times during the audit period. However, external factors such as pipeline pressure limitations prevented fuel switching in some cases, potentially impacting the effectiveness of NSPI's natural gas price hedging strategy.
Figure X-26: Average Annual OM&G Costs During Audit Period ($/MW) 485 Plant Audit Period Annual Average ($mm) Capacity (MW) Average Annual OM&G Costs per MW Biomass $6.3 43 $146,826 Wind $9.4 81 $116,660 Pt. Tupper $8.9 150 $59,661 Pt. Aco...
AI summary The text presents average annual OM&G costs during an audit period for various power plants in Nova Scotia, including biomass, wind, and hydroelectric facilities. It also notes that NSPI's OM&G costs averaged $13.32/MWh, with a slight decrease in thermal average costs compared to the prior audit period.
XII.B.1.d.iii. Surplus Energy Deliveries (Pursuant to EAA) Under the terms of the EAA, NSPI may (at its sole option) issue a competitive market solicitation ("EAA RFP") by June 15 for energy to be delivered in the next contract year.694 NL...
AI summary Under the EAA, NSPI can issue an EAA RFP by June 15 for surplus energy delivery. NLH must respond in good faith if it forecasts positive available energy, defined as energy beyond its native load and NS Block obligations. NLH is required to provide a forecast to NSPI by March, and forecasts for the Audit Period were received.
Figure XII-14: Summary of 2024 EAA RFP NLH Offer type Month On-Peak offer (MWh/month) Off-peak offer (MWh/month) Price (USD) Selected? Winning Volume (MWh) Total Contract Value (USD) NBEM Offer type Month On-Peak offer (MWh/month) Off-peak...
AI summary The document presents a summary table for the 2024 Electricity Act Request for Proposal (EAA RFP), including details such as offer types, months, on-peak and off-peak offers, prices, and contract values. It also mentions a section related to the 2025 EAA RFP.
XII.B.1.e. Final Audit Period Data for Imported Power 704 2025 Maritime Link Benefits Reports (Q1-Q4). 705 EAA, section 4.1 (a). Looking deeper at the data, the flows on the LIL were less than the hourly output of Muskrat Falls in about %...
AI summary The audit period data for imported power from Muskrat Falls shows that flows on the Labrador-Island Link (LIL) were less than the hourly output of Muskrat Falls in most hours. NSPI argues that the LIL's capacity limitation has not hindered energy imports, though increased capacity may help during peak demand. High power testing was completed in March 2026, and the LIL is expected to be upgraded to a higher rating soon.
intenance activities on the LIL which NSPI explained were scheduled for periods of lower system load and lower replacement energy costs. In all cases, makeup volumes were received relatively promptly. Conclusion XII-12: NSPI received 1,666...
AI summary NSPI received a significant portion of Base Block and Supplemental Block energy during the audit period, with some undelivered volumes at the beginning and surplus at the end. The maintenance activities on the LIL were scheduled during lower load periods with lower replacement energy costs.
XIII.B.1.c.i. 2024 (First Quarter) Period in the discussion below. NSPI completed its quarterly rebalance for the first quarter of 2024 in March. NSPI's forecast of EAA Surplus Energy was limited to approximately GWh in 2024, and between a...
AI summary NSPI completed its first quarter 2024 rebalance, adjusting its forecast of EAA Surplus Energy and incorporating PHP's load into its 2026 hedging decisions. Uncertainty around full rating tests and software updates influenced the reduced forecast. NSPI also purchased power hedges for 2026 and updated its load forecast, leading to changes in fuel exposure and expected imports.
Figure XV-4: PHP Costs and Payments833 Year Total Delivered Energy (MWh) Total Billed Charge Total Cost to Serve PHP Load ADC Benefit Off Schedule Charge Additional PHP Payment 2020 $55,507,679 $45,864,745 $6,624,312 $276,000 N/A 2021 $60,...
AI summary Figure XV-4 presents the PHP Costs and Payments from 2020 to 2025, showing variations in total billed charges, total cost to serve PHP load, ADC benefits, off-schedule charges, and additional PHP payments over time. The data highlights fluctuations in costs and benefits associated with the PHP program.
XV.B.3. Scheduling and ADC Benefits Over the audit period, PHP's load (MWh) corresponded reasonably closely to the target energy (MWh) as adjusted for each month although there were several monthly outliers.839 Figure XV-9 compares PHP mon...
AI summary The document analyzes PHP's load performance in 2024 and 2025, comparing actual delivered energy to monthly and annual targets. It highlights significant deviations in August and October 2024 and notes the impact of paper product demand on 2025 performance. The ADC Benefit was positive in 2025, but factors like fuel costs and load variability can affect it.